Missed the AUSTRAC enrolment deadline? What to do now

AUSTRAC set an enrolment deadline for the businesses brought under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act by the Tranche 2 reforms. A good number of real estate agencies did not make it, which is unsurprising given how many businesses were captured at once.

If that is your agency, the useful thing to know is that enrolment is the small part. It is a form. The obligations behind it are the work, and they began when the regime commenced regardless of whether the form was submitted.

What enrolment actually is

Enrolment tells AUSTRAC you exist and what you do. It covers the business, the designated services it provides, and who the AML/CTF compliance officer is. It is an administrative registration, not an assessment, and nobody reviews your program as part of it.

Enrolment opened several months before the deadline, and it remains open. Being late is a problem to fix rather than a door that has closed.

If you have missed it

Enrol anyway, today, rather than waiting until you have the rest sorted out. There is no version of this where being late and unenrolled is better than being late and enrolled, and the form does not require your program to be finished.

Then deal with the things that were required from commencement. In rough order of how exposed they leave you:

1. Know which of your work is captured

Obligations attach to designated services, not to being a real estate business. Brokering the sale, purchase or transfer of real estate is the captured service. Ordinary residential leasing of 30 years or less is excluded, and property management on its own is generally not the captured service. Our designated services guide has a checker for the common cases.

2. Get a program in place

AUSTRAC publishes a free starter kit written for real estate, which gives you the structure and the standard wording. What it cannot give you is your own risk assessment. See the starter kit guide.

3. Start verifying, and keep the evidence

This is the part that recurs on every deal. Customer due diligence (CDD) records have to be kept for seven years from the end of the business relationship, so a folder of licence photos on somebody's phone is a problem waiting for the moment it is most expensive to have.

One thing agencies get wrong

A common assumption is that due diligence has to be finished before a buyer can bid or sign. It does not, and real estate has its own timing rule precisely because a sale does not wait for paperwork.

Read that carefully, because the “whichever is earliest” is doing the work. On a quick settlement the three day rule bites well before the 28 days, and an agency planning around 28 days will miss it.

Some perspective

Tens of thousands of businesses were brought into this regime at once, across real estate, law, conveyancing, accounting and dealers in precious metals and stones. Being behind is common, and the reforms are the largest change to the regime in more than twenty years.

None of which changes the obligation. It just means the sensible response to being late is to start, not to wait for the situation to feel more manageable.

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